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CI

CLEANSPARK, INC. (CLSK)·Q4 2024 Earnings Summary

Executive Summary

  • FY 2024 revenue rose 125% YoY to $378.9M and adjusted EBITDA reached $245.8M; Q4 revenue is derived at ~$89.3M, down ~14% QoQ from Q3’s $104.1M, reflecting halving headwinds and lower BTC price into quarter-end .
  • CleanSpark exceeded year-end hashrate guidance, reaching 37.5 EH/s with fleet efficiency of 17.7 J/Th, and accelerated its 50 EH/s target to the first half of 2025, a key stock reaction catalyst tied to scale and efficiency narrative .
  • Balance sheet strength and funding secured: cash $122.2M and bitcoin $509.5M at FY-end, plus a $650M zero-coupon convert to fund growth to 50 EH/s while buying back ~11.76M shares—reducing near-term dilution risk .
  • Q3 non-cash impairment ($189.2M) and BTC fair value mark-to-market ($48.3M) framed FY loss dynamics; management emphasized deliberate fleet upgrades and efficiency-driven operating leverage .
  • Transcript for Q4 was not available; synthesis relies on the FY 8‑K/press release and Q4 operational updates (Oct/Nov), plus prior Q2/Q3 calls for trend analysis .

What Went Well and What Went Wrong

What Went Well

  • Exceeded 2024 YE hashrate guidance: achieved 37.5 EH/s and 17.7 J/Th; accelerated 50 EH/s target to 1H25, reinforcing scale and efficiency leadership .
  • Record FY 2024 performance: revenue $378.9M (+125% YoY) and adjusted EBITDA $245.8M; management highlighted “counter-cyclical growth and capital allocation strategy” and “owned infrastructure” advantages .
  • Operational execution: month-end Q4 hashrate and efficiency improved (Oct 31.3 EH/s, 20.89 J/Th; Nov 33.7 EH/s, 19.05 J/Th), with BTC production averaging ~21/day in Nov despite higher network difficulty .

Quotes:

  • “We produce durable, high performing growth…prioritized owned infrastructure…on our path to 37 EH by year-end and 50 EH and beyond in 2025.” — CEO Zach Bradford .
  • “Heading into 2025, we have significant scale and size, a healthy balance sheet… and a strong liquidity position.” — CFO Gary Vecchiarelli .

What Went Wrong

  • Q3 2024 reported net loss of ($236.2M) on non-cash items: ~$189.2M impairment from accelerated fleet upgrade and ~$48.3M BTC fair value mark-to-market, masking strong gross margins and underlying operations .
  • QoQ revenue decline into Q4: derived Q4 ~$89.3M vs Q3 $104.1M (~14% lower), as halving and difficulty pressured production economics despite hash growth .
  • Temporary trading halt in November related to clerical warrant conversion error (not operations-related), a headline risk that was resolved shortly thereafter .

Financial Results

Tables compare Q2–Q4 2024. Q4 values derived from FY totals minus 9M figures where quarter-specific disclosures were not furnished.

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$111.799 $104.108 $89.275 (FY $378.968 − 9M $289.693)
Net Income ($USD Millions)$126.735 ($236.242) ($84.067) (FY ($145.777) − 9M ($61.710))
Adjusted EBITDA ($USD Millions)$181.829 ($12.669) $7.598 (FY $245.848 − Q1 $69.090 − Q2 $181.829 − Q3 ($12.669))
Gross Margin %69.3% (($111.799 − $34.298)/$111.799) 57% 36.0% (($89.275 − $57.142)/$89.275) with 9M CoR $108.374; FY CoR $165.516
EPS (GAAP, Continuing)Q2 2024Q3 2024Q4 2024
Diluted EPS ($)$0.58–0.59 ($1.03) N/A (quarter not disclosed in FY press release)

KPIs and operating metrics:

KPIQ2 2024Q3 2024Q4 2024 (Quarter-end/period)
Bitcoin mined (units)2,031 (prior quarter reference for Q3 comparison) 1,583 Oct: 655; Nov: 622
End-of-period operating hashrate (EH/s)~16.4 EH/s (end Q2) 22.3 EH/s (early Aug status) 37.5 EH/s (Dec 23)
Fleet efficiency (J/Th)n/a disclosed22.3 J/Th (portfolio efficiency) 17.7 J/Th (Dec 23)

Q4 monthly operational detail:

MetricOct 2024Nov 2024
Bitcoin mined (units)655 622
Avg daily BTC mined21.14 20.72
Month-end operating hashrate (EH/s)31.3 33.7
Month-end fleet efficiency (J/Th)20.89 19.05

Notes:

  • Adjusted EBITDA is a non-GAAP measure; CleanSpark’s definition and reconciliation outlined in filings (see press and 8‑K). Management no longer excludes fair value changes on bitcoin or realized gains/losses on bitcoin from adjusted EBITDA .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating HashrateYE 202437 EH/s target 37.5 EH/s achieved Exceeded
Operating HashrateCY 202550 EH/s “and beyond in 2025” 50 EH/s expected in 1H 2025 (accelerated) Accelerated
Fleet EfficiencyYE 2024Implied improvement via upgrades 17.7 J/Th achieved Raised (achieved)
Capital PlanNear-termActive M&A + organic growth; strong liquidity $650M 0% convert closed; fully funds 50 EH/s; 11.76M shares repurchased Funding secured; dilution mitigated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4)Trend
Efficiency & fleet upgradesQ2: Secured S21/S21 Pro at “industry-low” pricing; scale drives unit economics; all-in power ~$0.043/kWh . Q3: Portfolio efficiency 22.3 J/Th; plan to remove rigs >22 J/Th; gross margin ~57% .Efficiency rising with 17.7 J/Th; ongoing upgrades supporting hashrate >37 EH/s .Improving
Halving impactQ2: Prepped financially/operationally; halving favors efficient miners . Q3: Halving cut rewards 50%; production down only 22%; maintained ~98% uptime .Q4 revenue/margins reflect halving/difficulty; offset by scale, efficiency and BTC price trajectory .Normalizing post-halving
M&A and geographic expansionQ2: Wyoming (75 MW), Tennessee pipeline, M&A prioritizing tuck-ins; owned assets . Q3: GRIID pipeline in Tennessee; 200–400 MW target by 2026 .GRIID closed Oct 30; TVA footprint; multiple sites energized in TN/WY; YE target exceeded .Accelerating
Power strategyQ2: Wholesale costs as low as $0.013/kWh; market-based approach; community/utility engagement . Q3: Portfolios across states, mix of fixed vs wholesale to manage spikes .Continued multi-state diversification; energization of MS/TN/WY sites .Diversified, resilient
HODL/treasuryQ2: Grew holdings by >2,000 BTC in quarter; fair value accounting adopted . Q3: ~6,600 BTC at 6/30 .~9,297 BTC at 11/30 (803 posted as collateral) .Growing
Funding/capital marketsQ2: Equity-first growth; M&A funded by cash/equity; use of coin possible . Q3: $50M Coinbase LOC secured (sub-10% cost) .$650M 0% convert closed; more than fully funds 50 EH/s; share repurchase executed .Strengthened

Management Commentary

  • “Reflecting on the past year, our results in FY 2024 and the positioning of the company going into 2025 demonstrated the wisdom of our counter-cyclical growth and capital allocation strategy…path to 37 EH by year-end and 50 EH and beyond in 2025.” — CEO Zach Bradford .
  • “We managed to recognize only 7% less revenue by mining 1,583 bitcoin in the period…recognized a net loss primarily due to…mark-to-market… and an impairment on older, less-efficient miners.” — CFO Gary Vecchiarelli (Q3) .
  • “Our strategy has always been one of infrastructure-first…distributor portfolio…not dependent on any single site or utility.” — CEO Zach Bradford (Q3) .
  • “All-in cost of energy was $0.048/kWh for the third quarter…average revenue per Bitcoin mined ~ $66,000.” — CFO Gary Vecchiarelli (Q3) .

Q&A Highlights

  • GRIID acquisition: closing dependent on S-4/SEC process (later completed Oct 30); key value was local relationships and TVA pipeline enabling 200–400 MW in TN .
  • Coinbase credit line: tool for opportunistic purchases/M&A; expected cost of capital below 10% .
  • Wyoming expansion: 75 MW under contract; “several hundred MW” targeted over 2025–2026 .
  • Fleet upgrade cadence: indicative 3-year cycle, timed to bear markets and new ASIC efficiency (leaning into immersion) .
  • Q2 build-outs: details on timelines, utility relationships, and secured transformers/switchgear for rapid energization .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of analysis due to data access limits; as a result, estimate comparison/beat/miss cannot be determined here. Values intended from S&P Global were not retrievable due to rate limits.

Key Takeaways for Investors

  • Scale and efficiency inflection: CleanSpark’s surpassing of 37 EH/s and 17.7 J/Th, with acceleration to 50 EH/s in 1H25, positions the company for operating leverage as difficulty and halving effects normalize .
  • Underlying profitability masked by non-cash Q3 items: strong gross margins and unit economics persisted; watch for margin recapture as fleet upgrades complete and efficiency improves further .
  • Funding/dilution risk reduced: $650M 0% convert, capped call, and share repurchase clarify near-term share count and fund growth to 50 EH/s without immediate equity issuance .
  • Geographic and power diversification: TVA-backed TN expansion plus WY/MS/GA footprint provides resilient cost structure and scalability; expect further M&A tuck-ins .
  • Treasury strategy adds upside optionality: BTC holdings grew to ~9,297 by Nov; fair value accounting increases P&L volatility, but HODL strategy leverages low production cost .
  • Near-term trading: narrative catalysts include continued energizations and monthly BTC updates; monitor December production and Q1 trajectory versus network difficulty .
  • Risk watchlist: regulatory shifts, power availability, execution on energization timelines, and BTC price/difficulty remain key sensitivity factors (as disclosed) .